Jane Van Ryan
Posted October 6, 2010
For months, numerous studies--such as this one from LSU professor Dr. Joseph Mason and another by Moody's Analytics--have demonstrated the significant economic impact the deepwater drilling moratorium could have on the Gulf and U.S. economies.
A Southern Methodist University (SMU) study released this week is no different, and it presents some alarming figures on the impact the de facto moratorium is having on shallow-water drilling.
According to Dr. Bernard L. Weinstein, associate director of SMU's Maguire Energy Institute, the Interior Department's slowdown in issuing new permits for shallow-water drilling operations could mean:
- 50,000 lost jobs;
- Economic losses of $4.3 billion that would occur if 75 percent of the rigs become idle as a result of fewer issued permits; and
- $12.5 billion in lost income nationwide.
As Dr. Weinstein points out, shallow-water drilling is extremely safe. In the last 15 years, the federal government reports that more than 11,000 wells have been drilled and just 15 barrels of oil have spilled as a result of a loss of well control:
"Shallow-water drillers work in less than 500 feet of water, mainly extracting natural gas. Projects center on well-charted fields of known pressure and geography, using simple and straightforward technology."
Prior to the moratorium, 10 to 15 permits for new shallow-water wells were approved each month. But since April, only seven permits for new shallow-water wells have been issued, and 15 of 46 shallow-water rigs in the Gulf are idle.
As Jack Gerard mentioned in a blog post last week, a drilling slowdown hurts more than just oil companies. It's time to put the oil and natural gas industry back to work and produce reliable American energy for Americans.
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